Japanese conglomerate SoftBank Group Corp. denied any connection between any plans to reduce its stake in Alibaba and the Chinese giant filing a share facility in the United States, Reuters reported.

  • SoftBank said Alibaba’s registration of the American depositary receipt conversion facility and its size is not linked to any particular future transaction by the Japanese firm. 
  • SoftBank earlier leveraged its shares in Alibaba as collateral for loans and cut down its stake in the firm through derivatives as a means to score gains from any climb in its stock price.
  • The clarification comes a week after Alibaba sought to register an additional 1 billion ADS, which analysts believed to suggest a potential selling by SoftBank, a 25% stake in the e-commerce giant.
  • A source close to the matter said SoftBank Chief Executive Masayoshi Son told analysts that he was surprised and denied requesting the filing. Alibaba’s shares have dropped some 60% from the high in October.

SoftBank earlier scrapped plans to sell chip designer Arm to Nvidia, dragging its fundraising plans so far. SFTBY closed up 0.30%, while BABA is up 1.46% premarket.